Codie Sanchez argues that 3.3% inflation creates an edge for investors buying cash-flowing businesses. With 2.3 million aging Boomer owners lacking succession plans and often not raising prices, buyers can acquire these businesses through seller financing at nominal rates that become cheap when inflation is factored in.
Chapters
If you're looking to invest, something wild happened that's the best thing to happen to investors all year. The CPI, the Consumer Price Index, just came in at its highest rate since 2024, 3.3%. What does this mean? Everybody's actually panicking. But if you're looking to put money to work, something called the inflation transfer is going to make you more money than anybody else. Here's why right now is the window. So inflation is a tax on your dollars, but it's a bonus if you own things. So right now your cash is sitting shrinking by 3% a year. Meanwhile, cash-flowing businesses raise prices, raise rent, and they ride inflation up. That's the side you want to be on. One, the tired sellers are ready. Boomers own a bunch of businesses in the US, about 2.3 million of them. They don't have a succession plan, and most of them never raise their prices. Then two, your cash is like, please use me, because if I sit on these savings, I'm losing money by doing nothing. So every month you wait, you actually lose more. Then 3, we've got seller financing, which is now really back. Banks tightened, they're not lending as much. So sellers are like, I need to sell this thing. All right, let's close a deal. You borrow at 7%, inflation runs at 3%, your real cost is 4%, it's a lot lower. So the seller is basically subsidizing you. How do you play it? You buy the unsexy but constantly printing money businesses. There's 3 questions you need to ask if you want to invest in businesses like this. You ask the owner, when did you last raise prices? If over 12 months, That's hidden margin you get. Number 2, would you consider getting paid in installments? If yes, that's a green light to seller financing. And 3, how about having a business where we allow you to keep some of the upside going forward when I grow this business? That's seller financing plus a decreased down payment. So go find a boring business that prints cash right now.
